In India, Investing is growing more popular day by day. Everyone wants to earn money from the share market. Share Market is one of the best ways to create wealth than any other sector. According to the data, We have various investment options but let me tell you why the share market is the best method to earn money
| Investment Options | Returns Per Year |
| Real Estate | 6 – 8% |
| Gold | 9 – 11% |
| Fixed Deposits | 6 – 8% |
| Saving Accounts | 6 – 8% |
| Share Market | 18 – 20% |
Based on the above table, we learned that the share market is giving higher returns than any other Investment options. But most people need clarification about how to earn money from the share market.
So In this blog, I am covering methods that will provide you with various methods to utilize the potential of the share market and earn money.
Trading
Trading is one of the best ways to make quick money in the share market. Online share trading means buying and selling the shares of companies listed in Sensex. An Investor can also trade in future options, securities, bonds, forex, and crypto. You can earn good money using trading. There are certain things that you should know before you start trading.
- Demat Account: To Start trading, you should have a demat account. You can open your demat account from any broker like Zerodha, groww, Angelone, etc.
- Know the Fundamentals: In every business, learning comes first before earning. As a beginner, you should understand the fundamentals of the share market. For trading, you should be aware of candlestick patterns, Price Actions, Indicators, and Trends in the market. There are various resources available where you can learn these things.
- Practice: Practice is the key to success in trading. Paper Trading is one of the most popular methods to learn the stock market. Paper Trading is a practice method for trading without using real money. You can make your strategies here and retest them before applying them in real time.
- Risk Management: Trading is a game of high profit and high loss. You can earn huge profits in a small moments and can lose your whole capital at the same time. Stop-loss is the most popular way to manage your risk in trading. It can avoid your big loss in the market.
Trading involves various risks that traders should be aware of: As per Sebi’s report, around 90% of traders lose their money in trading. It involves a lot of emotional and psychological control. I have seen a lot of traders who have lost lakhs of their money in trading. But it can provide you with a different lifestyle.
Many trades do full-time trading as a profession and earn crores. As per my suggestion, trading is a psychological game. If you can control your emotions then you can earn a lot of money through trading.
Learn Technical Analysis for Trading in easy words
Buy and Hold
Buy and Hold is the most popular and traditional method of earning money from the share market. It is also known as long-term investing. It involves purchasing stocks and holding them for a certain amount of time. There are certain benefits of Buy and Hold strategy that can help you to earn money from the share market:
- Capital Appreciation: In the long term, the value of a fundamentally strong company tends to increase due to various factors like revenue growth, business expansion, and profit growth. An investor can benefit from capital appreciation by holding stocks in these companies.
- Compounding Returns: Compounding is considered as 8th wonder of the world. The longer an investor holds onto a stock, the more time there is for the power of compounding to take effect. Reinvesting dividends and allowing the returns to generate further returns over time can significantly boost overall wealth accumulation.
- Avoid short-term Volatility: By using the buy-and-hold strategy, an investor can avoid short-term volatility. Short-term volatility can impact the emotions of an Investor resulting in lower returns.
- Dividend Income: The dividend is a portion of the profit paid by the company to its shareholders regularly such as quarterly or annually. By holding stock in a company, an investor can avail the benefit of a dividend income. The dividend is the best method to earn money from the share market using the buy-and-hold strategy.
Mutual Funds
Mutual funds are one of the best ways to earn money from the stock market for those who want to avoid risk and gain some significant returns. It has gained popularity in recent years due to its stable and secure returns. Mutual funds are managed by professional fund managers who do research and find good stock on your behalf.
Lumpsum and SIP(Systematic Investment Plan) are the two methods of investing in the Stock Market. If you have a surplus amount and want to invest in one way then lumpsum is for you. But if you want to invest some amount regularly then SIP is more recommended. I will suggest investing through SIP because it will be easy for you to invest your savings systematically. Most of the people prefer SIPs.
Mutual funds like ELSS(Equity linked Saving Scheme) provide tax benefits which make it an attractive choice for middle-class investors. So if you want to invest your money more securely mutual funds can be your ideal choice.
Buy Today Sell Tomorrow(BTST)
As the name suggests, Here you can buy shares today and sell them tomorrow to gain a minor profit. Let me clear this strategy with an example, Suppose today ITC shares have increased up to 5% and you buy it today and sell it the next morning. There are higher chances that the next day, ITC can show a gap up of to 2-3%. This gap-up can be your profit. Let’s understand with an example:
This is the graph of SJVN. Last day its price closed at around Rs. 116. If you have bought 100 shares last day then you can get a huge profit on the next day.
Previous Day Price = Rs. 116
Shares Buy = 100
Next Day High = Rs. 134
Net P/L Per Share = 134-116 = 18
Total P/L = 18*100 = Rs. 1800 means 15.5% profit in less than 24 hours.
I have used this strategy and gained some good profit.
Learn How to Invest Money in Share Market
Conclusion
When it comes to earning money from the share market, you have to be smart and capable of making quick decisions. Diversify your investment and stay calm during market fluctuations.
